ex10_2.htm


  
    Exhibit
10.2

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF

    ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND, AMONG

    OTHER
RESTRICTIONS, HAVE NOT BEEN REGISTERED UNDER THE UNITED

    STATES
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED,

    SOLD,
OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR

    HYPOTHECATED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION

    STATEMENT,
OR AN EXEMPTION FROM REGISTRATION, UNDER SUCH ACT

    


                                                        379,703
NPDC Warrants

    


    NATIONAL
PATENT DEVELOPMENT CORPORATION

    WARRANT
CERTIFICATE

    


    This
warrant certificate (“NPDC Warrant Certificate”) certifies that, for value
received, The Gabelli Small Cap Growth Fund or registered assigns (the “Holder”)
is the owner of the number of warrants (“NPDC Warrants”) specified above, each
of which entitles the Holder subscribe for and to purchase, at any time during
the Exercise Period (as hereinafter defined), one fully paid and non-assessable
share of Class A Common Stock, $.01 par value (“NPDC Common Stock”), of National
Patent Development Corporation, a Delaware corporation (“NPDC”), at an initial
purchase price as determined as set forth below, subject to adjustment as
hereinafter provided.

     

    1.       Issue; Exercise Price;
Agent

     

    1.1           The
NPDC Warrants evidenced hereby are part of the issue of a number of NPDC
Warrants as determined pursuant to the Note and Warrant Purchase Agreement (the
“Purchase Agreement”), dated August 8, 2003, among NPDC, its parent GP
Strategies Corporation, a Delaware corporation, MXL Industries, Inc., a Delaware
corporation, the purchasers named therein, and Gabelli Funds, LLC, as agent (the
“Agent”).

     

    1.2           Each
NPDC Warrant entitles the Holder to subscribe for and purchase one share of NPDC
Common Stock at an initial purchase price equal to 160% of the Current Market
Price (as defined below), subject to adjustment as hereinafter provided (the
“Exercise Price”). The Exercise Price and number of shares of NPDC Common Stock
issuable upon exercise of each NPDC Warrant (the “NPDC Warrant Shares”) are
subject to adjustment as provided below.

     

    1.3           Each
Holder, by accepting this NPDC Warrant Certificate, appoints and authorizes the
Agent as the agent of the Holder, to take such action as agent on its behalf and
to exercise such powers as are delegated to the Agent by the terms of the
Purchase Agreement. Without limiting the foregoing, each Holder acknowledges
that the NPDC Warrants may be amended by action of the Agent, with the consent
of holders of a majority of the then-outstanding NPDC Warrants, and that all
Holders of NPDC Warrants will be bound by any such amendment.

     

    2.       Exercise; Expiration
Date

     

    2.1           The
NPDC Warrants are exercisable, at the option of the Holder, at any time after
the last day of the Exercise Price Measurement Period (as defined below) and on
or before the Expiration Date (the “Exercise Period”), upon surrender of this
NPDC Warrant Certificate to NPDC together with a duly completed notice of
exercise, in the form attached hereto as Exhibit A (the “Notice of Exercise”),
and payment, in the manner provided below, of an amount equal to the Exercise
Price multiplied by the number of NPDC Warrants to be exercised. Such delivery
shall be made at NPDC’s office at 777 Westchester Avenue, Fourth Floor, White
Plains, New York 10604, or such other place as may be designated by NPDC by
notice to the Holder. The “Exercise Date” shall mean the date on which such
Notice of Exercise and payment are delivered to NPDC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2           The
“Expiration Date” shall mean 5:00 p.m. New York time on the fifth anniversary of
the Closing Date (as defined in the Purchase Agreement) or, if such date is not
a Business Day, then 5:00 p.m. New York time the next following Business Day.
“Business Day” shall mean any date which in the State of New York is not a
holiday or a day on which banks are authorized to close.

     

    2.3           The
Exercise Price for any NPDC Warrants shall be paid by delivery to NPDC, together
with the Notice of Exercise, of a certified or cashier’s check or checks, in
lawful money of the United States of America.

     

    2.4           Upon
each exercise of the Holder’s rights to purchase NPDC Warrant Shares, the Holder
shall be deemed to be the holder of record of the NPDC Warrant Shares issuable
upon such exercise, notwithstanding that the transfer books of NPDC shall then
be closed or certificates representing such NPDC Warrant Shares shall not then
have been actually delivered to the Holder. As soon as practicable, but no later
than five Business Days, after each such exercise, NPDC shall issue and deliver
to the Holder a certificate or certificates for the NPDC Warrant Shares issuable
upon such exercise, registered in the name of the Holder. In the case of
exercise of less than all the NPDC Warrants represented by this NPDC Warrant
Certificate, NPDC shall cancel this NPDC Warrant Certificate upon the surrender
hereof and shall execute and deliver to the Holder a new NPDC Warrant
Certificate for the balance of such NPDC Warrants.

     

    2.5           The
issuance of any NPDC Warrant Shares or other securities upon the exercise of
NPDC Warrants and the delivery of certificates or other instruments representing
such securities shall be made without charge to the Holder for any tax or other
charge in respect of such issuance. NPDC shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of any certificate in a name other than that of the Holder and NPDC
shall not be required to issue or deliver any such certificate unless and until
the person or persons requesting the issue thereof shall have paid to NPDC the
amount of such tax or shall have established to the satisfaction of NPDC that
such tax has been paid.

     

    2.6           No
fractional shares of NPDC Common Stock will be issued in connection with any
exercise hereof of NPDC Warrants, but, in lieu of such fractional shares, NPDC shall make a cash payment therefor in an amount equal to
the product of the applicable fraction and the Current Market Price as of the
Exercise Date.

     

    3.       Registration and
Transfer

     

    3.1           NPDC
shall maintain a register (the “Register”) for the registration and transfer of
the NPDC Warrants and the registration and transfer of NPDC Warrant
Shares.

     

    3.2           Prior
to due presentment for registration of transfer of this NPDC Warrant
Certificate, or the NPDC Warrant Shares issued upon exercise of the NPDC
Warrants evidenced hereby, NPDC may deem and treat the registered Holder thereof
in the Register as the absolute owner thereof. NPDC shall be entitled to treat
the registered holder of any NPDC Warrant on the Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such NPDC Warrant on the part of any other person,
and shall not be liable for any registration or transfer of NPDC Warrants which
are registered or to be registered in the name of a fiduciary or the nominee of
a fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. In all cases of transfer by an attorney, executor, administrator,
guardian, or other legal representative, duly authenticated evidence of his or
its authority shall be produced.

     

    
      
        
        

      

      
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    3.3           Neither
the NPDC Warrants evidenced hereby nor the NPDC Warrant Shares issuable upon
exercise hereof have been registered under the Securities Act of 1933, as
amended (the “Securities Act”). The Holders are entitled to the benefits of the
Registration Rights Agreement, dated August 14, 2003 (the “Registration Rights
Agreement”), made by NPDC in favor of the Holders. The Registration Rights
Agreement provides, among other things, for certain restrictions on the
disposition of the NPDC Warrants and the NPDC Warrant Shares, and each Holder,
by acceptance of a NPDC Warrant Certificate, accepts the restrictions and other
provisions of the Registration Rights Agreement. Without limiting the
foregoing:

     

    (a)           No
Holder may make any disposition of NPDC Warrants unless such disposition is (i)
to an investment company registered under the Investment Company Act of 1940, as
amended, which is advised by Gabelli Funds, LLC, (ii) of all of the NPDC
Warrants held by such Holder, (iii) to one or more transferees each of whom,
after giving effect to such disposition, will hold a number of NPDC Warrants at
least equal to one-fifteenth of the number of NPDC Warrants originally issued,
or (iv) required to enable such Holder to comply with any legal or regulatory
restrictions.

     

    (b)           In
addition, no Holder shall make any disposition of any NPDC Warrants or NPDC
Warrant Shares unless:

     

    (i) (A)
each transferee is an accredited investor, as such term is defined in Regulation
D promulgated  under the Securities Act, and has indicated in the Form
of Assignment  attached hereto as Exhibit B (the
“Form  of  Assignment”)  the  basis  on
which  such  transferee  is an
accredited  investor,  (B) each transferee has agreed in
writing to be bound by the terms of this NPDC Warrant
Certificate,  the Registration
Rights  Agreement,  and
the  Purchase  Agreement,  including,  without
limitation,  the provisions  thereof with respect to the
Agent and the
obligations  as  a  Security   Holder  (as  defined  in  the  Purchase
Agreement)  under the Purchase  Agreement,  (C)
such Holder shall have notified NPDC of the
proposed  disposition,  and (D) such Holder shall
have  furnished  NPDC with an opinion of counsel (which
opinion may be
delivered  by  in-house  counsel  of  Holder)
in the form set forth as Exhibit C, or
otherwise  reasonably  satisfactory  to
NPDC,  that such disposition  will not
require  registration  of
the  securities  to be disposed of under
the  Securities  Act,  provided that no such
opinion shall be  required  if
such  transfer  is  pursuant to (I) Rule 144(k)
promulgated  under the  Securities  Act or (II)
Rule 144A  promulgated under the Securities Act; or

     

    (ii)         
  in the case of a  disposition  of NPDC
Warrant  Shares,  such disposition is pursuant to and in
compliance with Rule 144 promulgated under
the  Securities  Act,  provided  that
NPDC may require that such Holder  shall
have  furnished  NPDC with an opinion of
counsel  (which opinion may be  delivered  by
in-house  counsel of Holder) in the form set forth as Exhibit C, or
otherwise reasonably  satisfactory to NPDC, that
such  disposition is in accordance with such Rule,  provided
that no such opinion shall be required if such transfer is pursuant to Rule
144(k) promulgated under the Securities Act; or

    
       

      (iii)           in
the case of a disposition of NPDC Warrant  Shares,  there is
then in effect a  registration  statement  under
the Securities Act covering such proposed  disposition  and
such  disposition  is made in accordance with such
registration statement.

       

    

    
      
        
        

      

      
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    The
execution and delivery of the Form of Assignment by the transferor and
transferee indicating the satisfaction of the requirements of Sections 3.3(a),
(b)(i)(A), (b)(i)(B), (b)(i)(C), and, if applicable, (b)(i)(D)(I) or
(b)(i)(D)(II) shall be sufficient to satisfy such requirements with respect to
the transfer of NPDC Warrants (except (other than with respect to Section
3(b)(i)(D)(II)) to the extent NPDC has notified the Holder promptly after
receipt of such Form of Assignment that to NPDC’s knowledge such requirements
are not met, specifying in such notice the reason NPDC believes such
requirements are not met).

     

    3.4           Each
NPDC Warrant Certificate, and each certificate representing NPDC Warrant Shares,
shall be stamped or otherwise imprinted with a legend substantially similar to
the following (in addition to any legend required under other applicable
securities laws):

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE  SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER AND, AMONG OTHER RESTRICTIONS, HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “ACT”) AND MAY
NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR AN
EXEMPTION FROM REGISTRATION, UNDER SUCH ACT

     

    3.5           NPDC
shall register in the Register any permitted transfer of a NPDC Warrant
Certificate, upon surrender of same to NPDC with a written instrument of
transfer, in the form attached as Exhibit B, duly executed by the registered
Holder or by a duly authorized attorney thereof and (unless being transferred to
NPDC) by the transferee or by a duly authorized attorney thereof, together with
such other documents as may be required for such transfer as provided above.
Upon any such registration of transfer, new NPDC Warrant Certificate(s) shall be
issued to the transferee(s) and the surrendered NPDC Warrant Certificate shall
be canceled by NPDC. A NPDC Warrant Certificate may also be exchanged, at the
option of the Holder, for new NPDC Warrant Certificates representing in the
aggregate the number of NPDC Warrants evidenced by the NPDC Warrant Certificate
surrendered.

     

    3.6           Upon
receipt by NPDC of reasonable evidence of the ownership of and the loss, theft,
destruction, or mutilation of any NPDC Warrant Certificate and, in the case of
loss, theft, or destruction, of indemnity reasonably satisfactory to NPDC, or,
in the case of mutilation, upon surrender and cancellation of the mutilated NPDC
Warrant Certificate, NPDC shall execute and deliver in lieu thereof a new NPDC
Warrant Certificate representing an equal number of NPDC Warrants.

     

    3.7           Upon
any transfer of NPDC Warrants or NPDC Warrant Shares pursuant to Section
3.3(b)(i), the transferee shall be entitled to all of the benefits enjoyed by
the transferor under the Purchase Agreement and the Registration Rights
Agreement, and the transferor shall be relieved of any obligations under the
Purchase Agreement arising after the date of such transfer.

     

    4.       Stock Fully Paid;
Reservation of Shares; Covenants

     

    4.1           NPDC
covenants that it will at all times reserve and keep available out of its
authorized NPDC Common Stock, solely for the purpose of issue upon exercise of
the NPDC Warrants, such number of NPDC Warrant Shares as shall then be issuable
upon the exercise of all outstanding NPDC Warrants.

     

    4.2           NPDC
covenants that all NPDC Warrant Shares issued upon exercise of the NPDC Warrants
shall be duly and validly issued and, upon payment for such shares as set forth
herein, fully paid and non-assessable and free from all taxes, liens, and
charges with respect to the issue thereof, and that upon issuance such shares
shall be listed on each national securities exchange, if any, on which the other
shares of outstanding NPDC Common Stock of NPDC are then listed.

     

    
      
        
        

      

      
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    4.3           NPDC
shall not by any action, including, without limitation, amending its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
action, avoid or seek to avoid the observance or performance of any of the terms
of this NPDC Warrant Certificate, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such actions as may
be necessary or appropriate to protect the rights of the Holder hereof against
impairment.

     

    4.4           In
case NPDC shall at any time (a) declare a stock dividend upon the NPDC Class B
Common Stock payable in shares of NPDC Class B Common Stock or (b) make any distribution upon the NPDC Class B Common Stock payable in
shares of NPDC Class B Common Stock or (c) subdivide the outstanding shares of
NPDC Class B Common Stock into a greater number of shares or (d) combine the
outstanding shares of NPDC Class B Common Stock into a smaller number of shares,
then and in any of such events NPDC shall make, declare, or effect a similar but
ratable stock dividend or distribution or subdivision or combination of the
shares of NPDC Common Stock but payable in shares of NPDC Common
Stock.

     

    5.           Adjustment of Exercise Price
and Number of NPDC Warrant Shares

     

    5.1           The
number of NPDC Warrant Shares or other securities or assets issuable upon the
exercise of each NPDC Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of certain events as
follows:

     

    (a)           Recapitalization,
Reorganization, Reclassification, Consolidation, Merger, or
Sale.

     

    (i)          
 If NPDC,  at any
time  after  the  Spin-Off  Date (as
defined  in the Purchase Agreement) while any NPDC Warrants are
outstanding, shall do any of the following (each a “Triggering
Event”):

     

    (A)           consolidate  with
or merge  into any other  Person  and NPDC shall
not be the continuing or surviving corporation of such consolidation or
merger;

     

    (B)           permit
any other  Person to  consolidate  with or merge
into NPDC and NPDC shall be the  continuing  or
surviving  Person but, in connection with
such  consolidation  or merger,  any capital stock
of NPDC shall be changed into or exchanged for securities of any other Person or
cash or any other property (excluding issuance by NPDC of its capital stock in a
merger or consolidation so long as the outstanding capital stock of NPDC is not
changed or exchanged);

     

    (C)           transfer
all or substantially all of its properties or assets to any other
Person;

     

    (D)           effect
a capital  reorganization or  reclassification of its
capital stock; or

     

    (E) enter
into any other transaction similar to any of the foregoing (provided that a
Triggering Event shall not include a consolidation or merger to which any
subsidiary of NPDC is a party so long as NPDC is not also a party to such
consolidation or merger),

     

    
      
        
        

      

      
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    then, and
in the case of each such Triggering Event, proper provision shall be made so
that, upon the basis and the terms and in the manner provided in this NPDC
Warrant Certificate, the Holder of the NPDC Warrants represented by this NPDC
Warrant Certificate shall be entitled.

     

    (F) upon
the exercise hereof at any time after the consummation of such Triggering Event,
with respect to any NPDC Warrants which are not exercised prior to such
Triggering Event, or are not redeemed in connection with such Triggering Event,
to receive at the Exercise Price in effect at the time immediately prior to the
consummation of such Triggering Event, the securities, cash, and property to
which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised such NPDC Warrants immediately
prior thereto, subject to adjustments and increases (subsequent to such
corporate action) as nearly equivalent as possible to the adjustments and
increases provided for in this Section 5, or

     

    (G) to
sell such NPDC Warrants (or, at such Holder’s election, a portion thereof) to
the Person continuing after or surviving such Triggering Event, or to NPDC (if
NPDC is the continuing or surviving Person), at a sales price payable in cash or
Marketable Securities or a combination thereof (as determined by such Person or
NPDC, as the case may be) equal to (I)the sum of the amount of cash and the fair
market value (as determined in the good faith judgment of the Board of Directors
of NPDC) of the property and/or securities to which a holder of the number of
shares of NPDC Common Stock which would otherwise have been delivered upon the
exercise of such NPDC Warrants (or the portion thereof so sold) would have been
entitled upon the effective date or closing of any such Triggering Event less
(II)an amount equal to the aggregate Exercise Price in effect immediately prior
to such Triggering Event applicable to all of such NPDC Warrants (or the portion
thereof so sold).

     

    (ii)
Notwithstanding anything contained in this NPDC Warrant Certificate to the
contrary, NPDC will not effect any Triggering Event unless, prior to the
consummation thereof, (A) each Person (other than NPDC) which may be required to
deliver any securities, cash, or property upon the exercise of NPDC Warrants, as
provided herein, or otherwise under this NPDC Warrant Certificate, shall assume,
by written instrument delivered to, and reasonably satisfactory to, the Holder,
(I) the obligations of NPDC under this NPDC Warrant Certificate (and, if NPDC
shall survive the consummation of such Triggering Event, such assumption shall
be in addition to, and shall not release NPDC from, any continuing obligations
of NPDC under this NPDC Warrant Certificate) and (II) the obligation to deliver
to such Holder such shares of securities, cash, or property as, in accordance
with the provisions of Section 5.1(a)(i), such Holder shall be entitled to
receive, and (B) such Person shall have delivered to such Holder an opinion of
counsel for such Person (which may be in-house counsel), which counsel shall be
reasonably satisfactory to such Holder, stating that this NPDC Warrant
Certificate shall thereafter continue in full force and effect and the terms
hereof (including, without limitation, all of the provisions of this Section
5.1(a)) shall be applicable to the securities, cash, or property which such
Person may be required to deliver upon any exercise of the NPDC Warrants or the
exercise of any rights provided in this NPDC Warrant Certificate.

     

    
      
        
        

      

      
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    (b) Subdivision or Combination
of Shares. If NPDC, at any time after the Spin-Off Date while any NPDC
Warrants are outstanding, shall subdivide or combine any shares of NPDC Common
Stock, (i) in case of subdivision of shares, the number of NPDC Warrant Shares
issuable upon exercise of each NPDC Warrant immediately prior to such
subdivision shall be proportionately increased (as at the effective date of such
subdivision or, if NPDC shall take a record of the holders of the NPDC Common
Stock for the purpose of so subdividing, as at the applicable record date,
whichever is earlier) to reflect the increase in the total number of shares of
NPDC Common Stock outstanding as a result of such subdivision, or (ii) in the
case of a combination of shares, the number of NPDC Warrant Shares issuable upon
exercise of each NPDC Warrant immediately prior to such subdivision shall be
proportionately reduced (as at the effective date of such combination or, if
NPDC shall take a record of the holders of the NPDC Common Stock for the purpose
of so combining, as at the applicable record date, whichever is earlier) to
reflect the reduction in the total number of shares of NPDC Common Stock
outstanding as a result of such combination.

     

    (c) Stock Dividends. If
NPDC, at any time after the Spin-Off Date while any NPDC Warrants are
outstanding, shall pay a dividend in, or make any other distribution to its
stockholders (without consideration therefor) of, shares of NPDC Common Stock,
the number of NPDC Warrant Shares issuable upon exercise of each NPDC Warrant
shall be adjusted, as at the date NPDC shall take a record of the holders of
NPDC’s capital stock for the purpose of receiving such dividend or other
distribution (or, if no such record is taken, as at the date of such payment or
other distribution), such that each NPDC Warrant shall thereafter evidence the
right to purchase a number of NPDC Warrant Shares determined by multiplying the
number of NPDC Warrant Shares issuable upon the exercise of each NPDC Warrant in
effect immediately prior to such record date (or if no such record is taken,
then immediately prior to such payment or other distribution) by a fraction, (i)
the numerator of which shall be the total number of shares of NPDC Common Stock
outstanding immediately after such dividend or distribution (plus, in the event
that NPDC paid cash for fractional shares, the number of additional shares which
would have been outstanding had NPDC issued fractional shares in connection with
said dividends) and (ii) the denominator of which shall be the total number of
shares of NPDC Common Stock outstanding immediately prior to such dividend or
distribution.

     

    (d) Other Distributions.
If NPDC, at any time after the Spin-Off Date, shall distribute to all holders of
NPDC Common Stock, or all holders of NPDC Common Stock shall otherwise become
entitled to receive, shares of capital stock of NPDC (other than dividends or
distributions on the NPDC Common Stock referred to in Section 5.1(c)), evidences
of its indebtedness, cash, assets (other than dividends or distributions payable
in shares of NPDC Common Stock), rights, options, or warrants providing the
right to subscribe for or purchase any shares of NPDC’s capital stock or
evidences of its indebtedness, or securities convertible into or exchangeable
for shares of NPDC Common Stock, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to
such event by a fraction, (i) the numerator of which shall be the Current Market
Price on the record date for the determination of shareholders entitled to
receive such distribution, less the fair market value (as determined in good
faith by the Board of Directors of NPDC) of the portion of the shares of NPDC’s
capital stock other than NPDC Common Stock, evidences of indebtedness, assets,
or such rights, options, warrants, or convertible securities, or the amount of
such cash, distributable with respect to each share of NPDC Common Stock, and
(ii) the denominator of which shall be the Current Market Price on such record
date. Such adjustment shall be made whenever any such distribution is made, and
shall become effective retroactively as of the record date for the determination
of shareholders entitled to receive such distribution.

     

    
      
        
        

      

      
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    (e)      Adjustment of NPDC Warrant
Shares. Upon each adjustment of the Exercise Price as a result of Section
5.1(d), each NPDC Warrant shall thereafter evidence the right to purchase, at
the Exercise Price as adjusted as provided therein, a number of Warrant Shares
equal to the product obtained by multiplying (i) the number of shares issuable
upon exercise of one NPDC Warrant prior to such adjustment by (ii) a fraction,
the numerator of which is the Exercise Price in effect immediately prior to such
adjustment and the denominator of which is the Exercise Price in effect
immediately after such adjustment.

     

    (f)      Adjustment Exercise
Price. All calculations under this Section 5.1 shall be made to the
nearest cent or to the nearest one-ten thousandth of a share, as the case may
be; provided, however that, no adjustment in the Exercise Price shall be
required if such adjustment is less than $.01; and provided, further, that
any  adjustments which by reason of this Section 5.1(f) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.

     

    (g) Changes to NPDC Warrant
Certificate. Anything in this Section 5.1 to the contrary
notwithstanding, NPDC shall be entitled, but shall not be required, to make such
changes in the number of NPDC Warrant Shares issuable upon the exercise of each
NPDC Warrant, or in the Exercise Price, in addition to those required by this
Section 5.1, as NPDC in its discretion shall determine to be advisable so that
any dividend or distribution in shares of NPDC Common Stock, subdivision,
reclassification, or combination of shares of NPDC Common Stock, issuance of
rights, warrants, or options to purchase NPDC Common Stock, or distribution of
shares of stock other than NPDC Common Stock, cash, evidences of indebtedness or
assets, or convertible or exchangeable securities made by NPDC to the holders of
the NPDC Common Stock shall not result in any tax to the holders of the NPDC
Common Stock or securities convertible into NPDC Common Stock.

     

    (h)           Other Action Affecting NPDC
Common Stock. If, after the Spin-Off Date, NPDC shall take any action
affecting the NPDC Common Stock, other than an action described in any of
Sections 5.1(a) through (d), inclusive, and the failure to make any adjustment
would not fairly protect the purchase rights represented by this NPDC Warrant
Certificate in accordance with the essential intent and principle of this
Section 5.1, then the number of NPDC Warrant Shares issuable upon exercise of
each NPDC Warrant and the Exercise Price, as applicable, shall be adjusted in
such manner and at such time as the Board of Directors of NPDC may in good faith
determine to be equitable in the circumstances.

     

    5.2           Notice
of Adjustments. Whenever the Exercise Price or the number of NPDC Warrant Shares
issuable upon the exercise of each NPDC Warrant is adjusted as provided in this
Section 5 hereof (for purposes of this Section 5.2, each an “adjustment”), NPDC
shall cause its Chief Financial Officer to prepare and execute a certificate
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description of the basis on which the Board made any determination
hereunder), and the Exercise Price or the number of NPDC Warrant Shares issuable
upon the exercise of each NPDC Warrant after giving effect to such adjustment,
and shall cause copies of such certificate to be delivered to the Holder at the
address of the Holder shown on the Register, promptly after each adjustment. Any
dispute between NPDC and the Holder with respect to the matters set forth in
such certificate may at the option of the Holder be submitted to the independent
accounting firm then regularly engaged by NPDC, which firm shall be requested to
deliver a written opinion as to such matters to NPDC and the Holder within 30
days after submission to it of such dispute. Such opinion shall be final and
binding on the parties hereto. The fees and expenses of such accounting firm
shall be paid by NPDC.

     

    
      
        
        

      

      
        - 8
-

        
          

        

      

      
        
        

      

    

     

    5.3           If,
at any time after the Spin-Off Date and prior to the expiration or exercise of
the NPDC Warrants, NPDC shall:

     

    (a)           pay
any dividend or make any distribution on the NPDC Common Stock;

     

    (b)           issue
any rights, warrants, or other securities to all holders of NPDC Common Stock
entitling them to purchase any additional shares of NPDC Common Stock or any
other rights, warrants, or other securities;

     

    (c)           effect
any reclassification or change of the outstanding NPDC Common Stock, or any
consolidation, merger, sale, lease, or conveyance of property described in
Section 5.1; or

     

    (d)           effect
any liquidation, dissolution, or winding-up of NPDC;

     

    then, and
in any one or more of such cases, NPDC shall mail written notice thereof to the
Holder at the Holder’s address as it shall appear in the Register, mailed at
least 10 days prior to (i) the date as of which the holders of record of shares
of NPDC Common Stock to be entitled to receive any such dividend, distribution,
rights, warrants, or other securities are to be determined or (ii) the date on
which any such reclassification, change, consolidation, merger, sale, lease,
conveyance of property, liquidation, dissolution, or winding-up is expected to
become effective.

     

    5.4           The
form of NPDC Warrant Certificate need not be changed because of any change in
the Exercise Price or the number of NPDC Warrant Shares or other securities or
assets issuable upon the exercise of a NPDC Warrant, and NPDC Warrant
Certificates issued before or after such change may state the same Exercise
Price, the same number of NPDC Warrants, and the same number of NPDC Warrant
Shares issuable upon exercise of NPDC Warrants as are stated in the NPDC Warrant
Certificates theretofore issued. NPDC may, however, at any time, in its sole
discretion, make any change in the form of NPDC Warrant Certificate that it may
deem appropriate in view of any such change and that does not affect the
substance thereof, and any NPDC Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding NPDC
Warrant Certificate or otherwise, may be in the form as so changed.

     

    5.5           In
any case in which this Section 5 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, NPDC
may elect to defer, until the occurrence of such event, issuing to the Holder,
if the Holder exercised NPDC Warrants after such record date, the shares of NPDC
Common Stock, if any, issuable upon such exercise over and above the number of
NPDC Warrant Shares, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that NPDC
shall deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder’s right to receive such additional shares upon the
occurrence of the event requiring such adjustment.

     

    6.           Definitions.

     

    6.1           For
purpose of this NPDC Warrant Certificate, the following terms have the following
meanings:

     

    
      
        
        

      

      
        - 9
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    The
“Current Market Price” on any date shall mean the average of the daily closing
prices of the NPDC Common Stock for the 20 consecutive trading days immediately
preceding the date in question, except that, for purposes of Section 1.2 only,
the “Current Market Price” shall mean the average of the daily closing prices of
the NPDC Common Stock over the 20 consecutive trading days commencing on the
record date for the Spin-Off (as defined in the Purchase Agreement) (the
“Exercise Price Measurement Period”). The closing price of the NPDC Common Stock
for each day shall be the last reported sales price regular way of such stock
or, if no such reported sale of such stock takes place on such day, the closing
bid price regular way of such stock, in either case on the principal national
securities exchange (including, for purposes hereof, Nasdaq) on which the NPDC
Common Stock is listed or admitted to trading or, if such stock is not listed or
admitted to trading on any national securities exchange, the highest reported
closing bid price for such stock as furnished by the Nasdaq or a similar
organization if Nasdaq is no longer reporting such information. If on any such
date the NPDC Common Stock is not listed or admitted to trading on any United
States national securities exchange and is not quoted by Nasdaq or any similar
organization, the fair value of a share of such stock on such date, as
determined in good faith by the Board of Directors of NPDC, whose determination
shall be conclusive absent manifest error, shall be used.

     

    “Person”
means an individual, a corporation, a partnership, a trust, a limited liability
company, an unincorporated organization, or a government organization or an
agency or political subdivision thereof.

     

    “Marketable
Securities” means securities of a class which are registered under the
Securities Act, whether or not such securities are actually registered under the
Securities Act, so long as such securities may be registered under the
Securities Act pursuant to currently exercisable demand registration
rights.

     

    7.       Miscellaneous

     

    7.1           The
Holder of any NPDC Warrant shall not have, solely on account of such status, any
rights of a stockholder of NPDC, either at law or in equity, or to any notice of
meetings of stockholders or of any other proceedings of NPDC, except as provided
in this NPDC Warrant Certificate.

     

    7.2           This
NPDC Warrant Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

     

    7.3           NPDC
stipulates that the remedies at law of the Holder in the event of any default or
threatened default by NPDC in the performance of or compliance with any of the
terms of this NPDC Warrant Certificate are not and will not be adequate and
that, to the fullest extent permitted by law, such terms may be specifically
enforced by a decree for the specific performance of any agreement contained
herein or by an injunction against a violation of any of the terms hereof or
otherwise. Time is of the essence in this NPDC Warrant Certificate.

     

    7.4           This
NPDC Warrant Certificate, the NPDC Warrants, and all other rights evidenced
hereby shall inure to the benefit of and be binding upon the permitted
successors and assigns of NPDC, the Holder, and (to the extent provided herein)
the holders of NPDC Warrant Shares issued pursuant hereto, and shall be
enforceable by any such Holder or holder of NPDC Warrant Shares.

     

    7.5           If,
in any action before any court or agency legally empowered to enforce any
provision contained herein, any provision hereof is found to be unenforceable,
then such provision shall be deemed modified to the extent necessary to make it
enforceable by such court or agency. If any such provision is not enforceable as
set forth in the preceding sentence, the unenforceability of such provision
shall not affect the other provisions of this NPDC Warrant Certificate, but this
NPDC Warrant Certificate shall be construed as if such unenforceable provision
had never been contained herein.

     

    
      
        
        

      

      
        - 10
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    7.6           The
headings of the Sections of this NPDC Warrant Certificate are for convenience of
reference only and shall not, for any purpose, be deemed a part of this NPDC
Warrant Certificate.

     

    IN
WITNESS WHEREOF, NPDC has caused this NPDC Warrant Certificate to be duly
executed by its officers thereunto duly authorized and its corporate seal to be
affixed hereon, as of this 3rd day of
December, 2004.

     

     

    
      	 	
              NATIONAL
      PATENT DEVELOPMENT

              CORPORATION

            	 
	 	 	 	 
	 	 	 	 
	
               

            	
              By:
      

            	/s/
      ANDREA
      KANTOR	 
	 	 	Name:
      	Andrea
      Kantor	 
	 	 	Title:
      	VP,
      General Counsel 	 


    

     

    
       

      
        
          	
                  Attest:

                	 
	 	 
	/s/ LYDIA
      M. DESANTIS	 
	Name:  
           	 Lydia
      M. DeSantis	 
	Title:       
       	 
      Corporate Secretary	 
	 	 


        

      

    

     

     

     

     

    
      
        
        

      

      
        - 11
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    EXHIBIT A

    


    NOTICE
OF EXERCISE

    


    The
undersigned hereby irrevocably elects to exercise,  pursuant to
Section 2 of the NPDC Warrant Certificate accompanying this Notice of
Exercise,  _______ NPDC  Warrants of the
total  number of NPDC  Warrants  owned by
the  undersigned pursuant to the accompanying  NPDC
Warrant  Certificate  (and, if such number of NPDC Warrants
is less than all of the NPDC Warrants  covered by
the  accompanying NPDC Warrant Certificate, that a new NPDC Warrant
Certificate for the balance of
such  NPDC  Warrants  be  registered  in
the  name
of,  and  delivered  to,  the
undersigned  at the
address  stated  below),  and
herewith  makes payment of the Exercise Price of such shares in full
by delivery of $__________ by certified or cashier’s check.

    


    Dated:  _________________

    
 

                              __________________________________

                              Name
of Holder

    


    


                               __________________________________

                              Signature

    


    


                              __________________________________

                              If
executed in a representative

                              or
fiduciary capacity, print

                              name
and title of individual

                              executing
this notice on behalf

                              of
the Holder

    


    


                              NOTE:
The above signature should

                              correspond
exactly with the name

                              on
the first page of this NPDC

                              Warrant
Certificate or with the

                              name
of the assignee appearing

                              in
the Form of Assignment

                             


                              __________________________________

                              Social
Security or Tax Identification Number of Holder

    


    


                              Address
of Holder:

                              __________________________________

                              __________________________________

                              __________________________________

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT B

    


    FORM
OF ASSIGNMENT

    


            (To
be executed by the registered holder if such holder desires to transfer the
attached Warrant.)

    


         FOR
VALUE  RECEIVED,  ______________________  (the
“Holder”)  hereby sells, assigns, and transfers unto

    


    
      	
                      Name

            	
              ________________________________

            
	
                      Address

            	
              ________________________________ 

            
	 	
              ________________________________ 

            
	 	
              ________________________________ 

            
	 	 
	 	Social
      Security or Tax Identification Number:
	 	
              ________________________________ 

            
	 	 


    

     

    ____           NPDC
Warrants, as defined in and represented by the accompanying NPDC Warrant
Certificate, together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _______________ attorney to transfer
such NPDC Warrants on the books of NPDC Strategies  corporation
(“NPDC”), with full power of substitution.

    


    ?           [CHECK
IF APPLICABLE] The undersigned is transferring the above NPDC Warrants pursuant
to the exemption from registration under the Securities Act of 1933, as amended,
provided by Section 4(1) of such Securities Act, and in connection therewith
represents that neither the undersigned, nor any person acting on behalf of the
undersigned, has solicited or will solicit any offer or published or will
publish any advertisement to sell or has offered to sell or will offer to sell
all or any part of such NPDC Warrants to any person or persons so as to bring
the sale of such NPDC Warrants by the undersigned within the registration
provisions of such Securities Act.

    


    ?           [CHECK
IF APPLICABLE] The undersigned is transferring the above NPDC Warrants pursuant
to the exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144(k) promulgated under such Securities Act, and in connection
therewith represents that the undersigned is not, and within the three months
prior hereto has not been, an affiliate of NPDC within the meaning of such
Rule.

    


    ?           [CHECK
IF APPLICABLE] The undersigned is transferring the above NPDC Warrants pursuant
to the exemption from registration under the Securities Act of 1933, as amended,
provided by Rule 144A promulgated under such Securities Act.

    


    Dated:
_________________

    


                            ________________________________

                            Name
of Holder

    


                            ________________________________

                            Signature

    


                            ________________________________

                            If
executed in a representative

                            or
fiduciary capacity, print

                            name
and title of individual

                            executing
this notice on behalf

                            of
the Holder

    


                            NOTE:  The
above signature should correspond exactly

                            with
the name on the first page of this NPDC Warrant

                            Certificate

     

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

    
                        ________________________________

                            Social
Security or Tax Identification Number of Holder

    


                            Address
of Holder:

    


                            ________________________________

    


                            ________________________________

    


                            ________________________________

     

     

     

     

    
      
        
        

      

      
        - 2
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    Each undersigned transferee, by execution hereof, (i)
represents and warrants to NPDC that (a) such transferee is an accredited
investor, as such term is defined in the Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), pursuant to the
provision or provisions of such definition as indicated below, (b) if box (B)
below is checked, the undersigned is an investment company registered under the
Investment Company Act of 1940, as amended, which is advised by Gabelli Funds,
LLC, (c) if box (C) below is checked, the undersigned is a qualified
institutional buyer, as such term is defined in Rule 144A promulgated under the
Securities Act, and is acquiring the NPDC Warrants transferred hereby pursuant
to such Rule 144A, (d) unless the undersigned transferee is an investment
company referred to in clause (b) above, or is acquiring all of the NPDC
Warrants held by the Holder, the undersigned
will hold, after giving effect to the transfer effected hereby, not less than
one-fifteenth of the number of NPDC Warrants originally issued by NPDC on the
Spin-Off Date (as defined in the NPDC Warrant Certificate), (e) the undersigned
is acquiring the NPDC Warrants, and will acquire any NPDC Warrant Shares (as
defined in the NPDC Warrant Certificate), for investment and without a view to a
distribution other than pursuant to a registration statement under the
Securities Act and applicable state securities laws, or an exemption therefrom,
and (f) the name, address, and social security or tax identification number of
the undersigned are as set forth above, and (ii) agrees to be bound by the terms
of the NPDC Warrant Certificate, the Registration Rights Agreement, and the
Purchase Agreement (each as defined in the NPDC Warrant Certificate), including,
without limitation, the provisions thereof with respect to the Agent (as defined
in such Purchase Agreement) and the obligations as a Security
Holder

    (as
defined in the Purchase Agreement) under the Purchase Agreement.

    


    The
undersigned is an accredited investor under the following
provisions:

    


    
      	
              ___
      (i)

            	
              a
      bank as defined in Section 3(a)(2) of the Securities Act, or a savings and
      loan association or other institution as defined in Section 3(a)(5)(A) of
      the Securities Act whether acting in its individual or fiduciary capacity;
      a broker or dealer registered pursuant to Section 15 of the Securities
      Exchange Act of 1934; an insurance company as defined in Section 2(13) of
      the Securities Act; an investment company registered under the Investment
      Company Act of 1940 or a business development company as defined in
      Section 2(a)(48) of that Act; a Small Business Investment Company licensed
      by the U.S. Small Business Administration under Section 301(c) or (d) of
      the Small Business Investment Act of 1958; a plan established and
      maintained by a state, its political subdivisions, or any agency or
      instrumentality of a state or its political subdivisions, for the benefit
      of its employees, if such plan has total assets in excess of $5,000,000;
      an employee benefit plan within the meaning of the Employee Retirement
      Income Security Act of 1974, if the investment decision is made by a plan
      fiduciary, as defined in Section 3(21) of such Act, which is either a
      bank, savings and loan association, insurance company, or registered
      investment adviser, or if the employee benefit plan has total assets in
      excess of $5,000,000 or, if a self-directed plan, with investment
      decisions made solely by persons that are accredited
      investors;

            


    

     

    
      	
              ___      (ii)

            	
              a
      private  business  development  company  as  defined  in
      Section 202(a)(22) of the Investment Advisers Act of
  1940;

            


    

    
       

      
        	
                ___      (iii)

              	
                

                  an  organization  described
      in Section  501(c)(3) of the Internal Revenue Code of 1986, as
      amended, corporation, Massachusetts or similar business trust, or
      partnership,  not formed for the specific purpose of
      acquiring  NPDC Warrants or NPDC
      Warrant  Shares,  with total assets in excess of
      $5,000,000;

                

              


      

      
         

        
          	
                  ___      (iv)

                	
                  

                    a
      director or executive officer of
NPDC;

                  

                


        

         

      

    

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

     

    
      
        	
                ___      (v)

              	
                

                  a
      natural  person whose  individual  net
      worth,  or joint net worth with that
      person’s  spouse,  at the time of his or her purchase
      exceeds $1,000,000;

                

              


      

       

    

    
      	
              ___      (vi)

            	
              a
      natural  person who had an individual  income (not
      including his or her spouse’s  income) in excess of $200,000 in
      the last two years or joint  income  with his or her
      spouse in excess of  $300,000 in each of those years and has a
      reasonable  expectation  of reaching  such
      income level in the current year;

            


    

     

    
      	
              ___      (vii)

            	
              a
      trust,  with total assets in excess
      of  $5,000,000,  not formed for
      the  specific  purpose of
      acquiring  NPDC  Warrants or NPDC Warrant
      Shares,  whose  purchase is directed by a person
      having such  knowledge and  experience  in
      financial  and  business  matters that he or
      she is capable of evaluating  the merits and risks entailed in
      the purchase of the NPDC Warrants or NPDC Warrant Shares;
    or

            


    

     

    
      	
              ___      (viii)

            	
              an  entity
      in which all of
      the  equity  owners  are  accredited
      investors  (if  this  alternative  is  checked,  the  undersigned  must
      identify how each equity owner is qualified as an accredited
      investor).

            


    

     

    (B) ?
[CHECK, IF APPLICABLE] The undersigned is an investment company registered under
the Investment Company Act of 1940, as amended, which is advised by Gabelli
Funds, LLC

     

    (C) ?
[CHECK, IF APPLICABLE] The undersigned is a qualified institutional buyer, as
such term is defined in Rule 144A promulgated under the Securities Act, and is
acquiring the NPDC Warrants transferred hereby pursuant to such Rule
144A

     

    


    Dated:
_________________

    


                                    --------------------------------------

                                    Name
of Transferee

    


    


                                   
________________________________

                                    Signature

    


    


                                   
________________________________

                                    If
executed in a representative

                                    or
fiduciary capacity, print

                                    name
and title of individual

                                    executing
this notice on behalf

                                    of
the transferee

    


                                    NOTE:  The
above signature should correspond

                                    exactly
with the name set forth above

    
 

    
      
        
        

      

      
        - 4
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    EXHIBIT C

    


    FORM
OF OPINION REGARDING TRANSFER

    


    [In-house
Counsel letterhead]

    


    


    GP
Strategies Corporation

    777
Westchester Avenue, 4th Floor

    White
Plains, NY 10604

    


    [Name/address
of transfer agent]

    


    Ladies
and Gentlemen:

    


    I am
[insert title of opinion giver] for [insert name of transferor] (“Seller”), and
have acted as in-house counsel of Seller in connection with the sale and
transfer (the “Transaction”) by Seller to [insert buyer’s name] (the
“Transferee”) of [ ] warrants (the “Warrants”) for the purchase of shares of
Class A Common Stock (the “Common Stock”), par value $0.01 per share]/[[ ]
shares (the “Shares”) of Class A Common Stock (the “Common Stock”), par value
$0.01 per share] issued by National Patent Development Corporation, a Delaware
corporation (the “Company”). Capitalized terms used and not otherwise defined
herein
shall have the meaning ascribed to them in the Note and Warrant Purchase
Agreement, dated as of July __, 2003, by and among the Company, GP, MXL, the
Agent (each as defined therein) and the Purchasers listed in Schedule 1.2
thereof (the “Purchase Agreement”).

    


    In
connection with this opinion, I have examined copies of the following documents:
(a) the Purchase Agreement, (b) the Note, (c) the GP Warrant Certificate, (d)
the NPDC Warrant Certificate, (e) the GP Registration Rights Agreement, (f) the
NPDC registration Rights Agreement (the documents set forth in (a)
thorough (f) being the “Transaction Documents”), and (g) [Form of Assignment
dated [ ] from Seller to Transferee, a copy of which is attached hereto as
Exhibit A (the “Form of Assignment”)] /[stock certificate number [ ] evidencing
[ ] the Shares and the accompanying stock power executed by the Seller to
effect the transfer of the Shares to Transferee, copies of which are attached
hereto as Exhibit A (the “Stock Documents”)].

    


    I have
also examined such certificates of public officials, such certificates of
officers of Seller and Transferee, the originals (or copies thereof) of such
other documents and records of the Seller, and such other documents and
instruments as I have deemed necessary or appropriate for purposes of this
opinion.
In addition I have examined such matters of law as I have deemed necessary or
appropriate for purposes of this opinion

    


    In
rendering my opinion, I have assumed the genuineness of all signatures on all
documents so examined, the authenticity of all documents, records and
instruments submitted to me as originals and the conformity with the original
documents, records and instruments of all such documents, records and
instruments
submitted to me as copies and the legal capacity to sign of all individuals
executing such documents. I have not independently verified the foregoing
assumptions.

    


    I have also assumed that there are no oral modifications or
written agreements or understandings which limit, modify or otherwise alter the
terms, provisions and conditions of, or relate to, the transactions contemplated
by the Transaction Documents. As to various questions of fact material to my
opinion, I have
assumed and have relied without independent investigation upon the accuracy and
completeness of the above-mentioned certificates and documents and upon the
representations and warranties contained in the Transaction
Documents.

     

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

     

    [Rule 144
Documents and Assumptions Applicable to Sale of Common Stock Only]

    


    [I have
also received a copy of written correspondence indicating that the Seller has
filed a notice on Form 144, dated [ ] (the “Form 144”), with the Securities and
Exchange Commission in connection with the sale of the Shares. The Form 144
indicates that (i) the Seller intends to sell the Shares, all of which were
acquired from [ ] (the “Prior Holder”) on [ ], (ii) the Seller has not sold any
shares of Common Stock during the three months preceding the filing of the Form
144, and (iii) the aggregate number of shares of Common Stock outstanding is [
]. I also received a copy of a written representation letter, dated [ ] (the
“Broker’s Letter”), from [ ] (the “Broker”) indicating that the sale of the
Shares was made in a “brokers’ transaction”1 as that term is defined in Rule 144
under the Securities Act of 1933, as amended (the “Securities Act”), and that
the Broker did not solicit or arrange for the solicitation of orders to buy the
Shares in anticipation of the sale of the Shares.

    


    The
Common Stock is registered pursuant to Section 12(g) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the Company has been subject
to the reporting requirements of Section 13 of the Exchange Act for a period of
at least 90 days immediately preceding the sales of the Securities.
]

    


    [4(1)1/2
Assumptions Applicable to Transfer of Common Stock or Warrants]

    


    [I have
further assumed, with your permission and without independent investigation,
that (i) Transferee has had a full opportunity to ask questions and receive
answers from the Seller and the Company with respect to matters necessary for it
to make an informed investment decision regarding the [Shares/Warrants] and the
Company and (ii) all of the proceeds of the Transaction will inure solely to the
benefit of the Seller and no portion thereof will inure to the benefit of the
Company.

    


    I have
relied with your permission and without independent investigation on
Transferee’s representations set forth in the Form of Assignment that (i)
Transferee acquires the [Shares/Warrants] for its own account and not with a
view towards the distribution or resale thereof within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”) and (ii) neither
Seller nor any agent on its behalf has solicited or will solicit any offers or
published or will publish any advertisement to sell or has offered to sell or
will
offer to sell all or any part of the [Shares/Warrants] to any person or persons
so as to bring the sale of such [Shares/Warrants] by Seller within the
registration provisions of the Securities Act.

    


    For
purposes of this opinion, I have also assumed, without independent
investigation, as indicated by the legends thereon, that before the Transaction
the [Shares/Warrants] were “restricted securities” as that term is construed
under Rule 144 under the Securities Act.]

    


    Based
upon and in reliance on the foregoing, and subject to the limitations heretofore
and hereinafter expressly set forth, I am of the opinion that the sale and
transfer of the [Shares/Warrants] by the Seller to Transferee does not require
registration under the Securities Act.

    
       

      My
opinion is limited to the Federal laws of the United States of America and I do
not express any opinion as to the laws of any other state or jurisdiction. No
opinion is expressed as to the effect that the law of any other jurisdiction
might have upon the subject matter of the opinion expressed herein under
conflicts
of laws principles or otherwise. Except for the opinions set forth in the
paragraph immediately above, I express no opinions and no opinions should be
implied. I render no opinion with respect to antitrust laws, environmental laws,
state securities laws or the law of fiduciary duty. Except as expressed in the
paragraph immediately above, I express no opinion with respect to securities
laws.



    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    The
opinion expressed herein is intended solely for your benefit in connection with
the transfer of the [Shares/Warrants] as described above and may not be relied
upon or used by or circulated, quoted or otherwise referred to any other person
or entity or for any other reason. This opinion speaks only as of the
date
hereof and is limited to matters expressly stated herein and the law as in
effect on the date hereof. I disclaim any undertaking to advise you of changes
in law or facts that may be brought to my attention after the date
hereof.

    
 

    Very
truly yours,

    


    


    --------

    1 If
transaction is effected through a “market maker” as that term is defined in Rule
144, revise this paragraph accordingly.

    


    2 This
opinion should be modified to reflect any change to laws governing such matters
between the date of the Purchase Agreement and the time of its
delivery.

    


    3 In the
case of a transfer of Shares where no Form of Assignment is provided, please
replace the reference to the Form of Assignment with reference to officer
certificates which the opinion giver should obtain from the Transferee and
Seller.

     

     

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